Building a Mature Product-Led Operating Model: The 4 Stages of Digital Transformation
As much as we talk about technology when we refer to Digital Transformation, the reality is that the work is as much about people and business processes as it is about the platforms and capabilities companies are adopting. Transformation requires a significant cultural shift— especially if you’re also undergoing a project-to-product transformation—and, I’ll be honest, the road is never linear. Teams often stall out between stages because they aren’t entirely clear on when or how to push forward, but leaders have the opportunity to light the way.
In this article, I’ll break down the four stages of digital transformation and identify the common transitions that stump teams and block momentum on the road to building a mature product-led operating model.
The Four Stages of Digital Transformation
Digital Transformation is the process of integrating digital technologies into various aspects of a business, which leads to fundamental changes in how the business operates and delivers value to its customers.
Most transforming companies also decide to undergo Project-to-Product (P2P) Transformation, which is a strategic shift in how organizations conceptualize and execute their initiatives. Unlike the conventional project-centric approach, P2P focuses on treating products or services as ongoing entities with lifecycles, continuous development, and an unswerving commitment to meeting customer needs.
This is all to say that humans are at the heart of transformation, which means that cultural norms, institutional knowledge, and legacy mindsets are often blockers to momentum.
Additionally, if you’re leading teams who have never worked for a transforming organization or a product-led org before, the path forward isn’t always clear when it comes to uncharted territory. And all of this can block teams from advancing from one stage to the next.
So, what helps? First, a general understanding of the four stages of digital transformation. From there, you can evaluate where your teams currently stand, if they’re ready for the next phase, or if they’re stuck spinning their wheels.
Stage 1: Design + Education
Organizations typically start their Digital Transformation efforts in a design and education phase. This stage puts a lot of emphasis on:
Evaluating where the org is and where it wants to be
Mapping out the future state of the operating model
Designing the road forward
Defining key concepts and frameworks in the context of the company’s market and culture
Educating people along the way
This stage needs to result in buy-in, winning people over, and getting teams on board for the work ahead.
Stage 2: Activation
Things really start getting fun in stage two when the design gets put into action. That might mean a small-scale pilot, an all-in approach, or another inroad to rolling out the plan. Here, you’ll start standing up teams and activating different parts of the organization, making adjustments over time. Once teams start building a little muscle memory around new processes and protocols, they’re ready for Stage 3.
Stage 3: Scaling
This is the “Everybody in the pool!” phase. It can take a while to get here because it takes a while to get teams up and running. This is actually where I see most teams struggle in terms of graduating to the next phase. Often, teams get stuck in phase three because they just assume that once most teams are up and running, the work is done. While it may be true that a lot of teams are embarking on new ways of working, it doesn’t mean they’re good at it yet, which is where the next phase comes in.
Stage 4: Getting Good
You’ve stood up your product teams and everyone’s (hopefully) in the pool. Now it’s time to help people practice and become strong swimmers. Here, in stage four, you start to see the maturation of a product-led operating model and a shift among teams to become more independent, autonomous, and innovative. Stage four has its own set of practices that differ from stage three, but they are equally important to becoming a successful product-led organization.
Shifting From Stage to Stage
In my career, I see leaders and teams struggle to know when it’s time to shift from one stage to the next, specifically in the transition from Stage 1 to Stage 2, and from Stage 3 to Stage 4.
Teams often get stuck in Stage 1 because they’re hesitant to jump in, or are stuck trying to perfect everything before heading into implementation. This is typically where the Tuckpoint team has to push people into the pool (gingerly and with the best intentions, of course!).
We also see teams get stuck in Stage 3 because everyone assumes the work is done once all the teams are stood up, but that doesn’t mean they’re excelling yet. Shifting to Stage 4 is where we help teams go from good to great to excellent.
If you don’t prepare for these turning points thoughtfully, they may never happen, or they might get away from you (by occuring in the wild without preparation and guidance). In either case, it becomes a barrier to maturity and the ability to tap into all the benefits of a product-led operating model. When you know the readiness signs to look for and make a plan to lead the way, it radically accelerates your progress and modernizes your organization.
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